South Korea’s is offering cash to entice rich people to have kids due to low fertility rate crisis

South Korea’s declining fertility rate is one of the world’s lowest, and the government’s efforts to reverse the trend have been largely unsuccessful.

Because of the dropping fertility rate, or the number of children a person is most likely to have in their life, South Korea’s population is expected to begin decreasing in the next 10 years. The government’s cash subsidies – monthly payments that most parents are eligible for – have not made a substantial difference so far.

But South Korea recently said it would expand the monthly subsidies of up to $270 (almost R4,000) to include the wealthiest 10% of people in the country, according to a report from Agence France-Presse. In September, the government started a subsidy system of about $88 (R1,200) a month for parents of children under 5. The report did not specify whether the subsidies would be restricted for certain items.

In addition, starting in late 2019, parents with children below the age of 8 will be allowed to spend one less hour at work each day to take care of their kids, and paid paternity leave will cover 10 days instead of three, the report said.

South Korea’s fertility rate fell to a record low 0.95 this year; demographers have said a country’s fertility rate needs to be at least 2.1 for its population to be stable. The South Korean government has spent about $121 billion over the past 13 years on efforts to increase the rate, according to the AFP report.

AFP reported that South Korea’s fertility-rate crisis persists for several reasons, including high costs of child-rearing, limited daycare, and long hours at work. Some South Koreans have said they are not having children because of a lack of financial stability.

South Korea also holds the oldest average age at which a person has their first child, at 31.

A 2014 study commissioned by South Korea’s National Assembly and cited by the Brookings Institution found that South Koreans could “face natural extinction” by 2750 if the country’s fertility rate were to remain at 1.19.

As South Korea tries to increase the number of births in the country, the government has pledged to build more kindergartens and daycare centres.

“This package is to focus on giving hope to people aged in their 20s to their 40s and to make certain that their quality of life does not deteriorate when opting for marriage and childbirth,” Kim Sang-hee, the vice chairperson of a presidential task force focusing on the issue, told AFP.